Growing investor confidence in US trade deals has led to a significant rebound in stock markets, with the S&P 500 rising 5.3% and the Nasdaq Composite soaring 7.2%. This surge follows news of a 90-day tariff pause with China, which has prompted Wall Street strategists to adopt a more bullish outlook on equities. Despite the positive momentum, analysts caution that most tariffs are merely paused, and ongoing negotiations leave considerable policy uncertainty in the markets.

The Federal Reserve's stance on interest rates is also influenced by the recent tariff developments, with expectations shifting towards a potential rate cut in July rather than June. Economists believe that the odds of a recession have decreased due to the tariff pause, which has contributed to a more optimistic growth outlook for the US economy. However, the Fed's wait-and-see approach remains, as they emphasize the need for clear evidence of economic stability before making any rate cuts.